MUSHTAQ GHUMMAN
ISLAMABAD: The Petroleum Division has proposed a Rs75 billion Fuel Relief Scheme for three months to provide targeted relief of Rs100 per litre to around 11.8 million users of two-wheelers, three-wheelers and cars up to 800cc amid a sharp increase in petroleum prices triggered by the Gulf crisis.
According to a summary submitted to the Economic Coordination Committee (ECC) of the Cabinet, the proposed scheme would provide a maximum monthly relief of Rs2,000 to users of two- and three-wheelers and Rs3,000 to users of cars up to 800cc.
Under the proposed mechanism, eligible users of motorcycles and three-wheelers would be entitled to relief on up to 20 litres of petrol per month, while users of cars up to 800cc would receive relief on up to 30 litres per month.
The Petroleum Division has estimated that the scheme would benefit around 11.8 million people, including 10 million two-wheeler users, 0.8 million three-wheeler users and one million users of cars up to 800cc.
The estimated monthly fiscal impact of the scheme has been placed at Rs24.6 billion, including Rs20 billion for two-wheelers, Rs1.6 billion for three-wheelers and Rs3 billion for small cars.
The proposal has been floated against the backdrop of a substantial increase in domestic petroleum prices. The Petroleum Division noted that petroleum product prices had already increased considerably over the past six months, while international prices witnessed an unprecedented surge during the preceding few days.
According to the summary, between July 1 and September 11, 2026, the price of petrol increased by Rs72 per litre, or 24 percent, while High-Speed Diesel (HSD) rose by Rs87 per litre, or 28 percent.
On September 11 alone, the price of HSD increased by Rs11.13 per litre, or 3.5 percent, while petrol also rose by Rs11.13 per litre, or three percent.
The Petroleum Division’s comparison shows that petrol, which was priced at Rs266 per litre on March 1, 2026, increased to Rs299 per litre on July 1 and reached Rs371 per litre on September 11, showing a cumulative increase of Rs105 per litre.
Similarly, HSD increased from Rs281 per litre on March 1 to Rs311 per litre on July 1 and further to Rs398 per litre on September 11, registering a cumulative increase of Rs117 per litre.
The Petroleum Division stated that consumers, particularly lower-income groups, were facing a severe economic shock due to higher petroleum prices and the resultant increase in general inflation.
“There is visible public pressure and simmering unrest,” the division observed, adding that the situation required policy action.
The Prime Minister subsequently directed the authorities to formulate a mechanism for providing relief to the poorest segments of society.
A series of consultations were held under the leadership of the Deputy Prime Minister, involving the Minister for Petroleum, Minister for Economic Affairs, Minister for IT and Telecom and senior officials of the Finance Division, Ministry of IT and Telecom, Petroleum Division, OGRA and State Bank of Pakistan.
The proposed scheme would provide relief to the user rather than the owner of the vehicle. Only one vehicle would be allowed per user.
The mechanism would use the user’s CNIC, vehicle registration number and mobile phone number as key controls to prevent multiple claims against the same individual or vehicle.
The Petroleum Division has estimated the total registered base of relevant vehicles at around 34 million. After assuming a retirement rate of 40 percent, the operational number of two-wheelers has been estimated at around 20.6 million.
Based on the experience of an earlier relief scheme, the number of beneficiaries from two-wheelers has been estimated at 10 million.
Digital Fuel Pass System
A key component of the proposed initiative is the digital implementation of the scheme through a Fuel Pass System (FPS).
The system is proposed to cover registration, issuance of tokens, validation and settlement, third-party verification, SMS services and other related functions.
The government has sought Rs75 billion through a Technical Supplementary Grant (TSG) in favour of the Ministry of Petroleum under Demand No. 36 to implement the Fuel Relief Scheme.
In addition, the Petroleum Division has proposed a further Rs1.73 billion through a TSG in favour of the Ministry of IT and Telecom to meet expenditure required for operationalising the Fuel Pass System.
The amount would cover technological solutions, call-centre operations, SMS services, FPS software development and deployment, registration, token issuance, validation and settlement modules, third-party validation and verification and other ancillary expenditures.
The Ministry of IT and Telecom and its relevant entities involved in the process may be authorised to invoke the relevant procurement rules to make necessary procurements and expenditures for operationalising the system.
The summary has been finalised jointly with the Ministry of IT and Telecom and reflects the respective funding requirements to be provided through grants managed by the relevant Principal Accounting Officers.
The document said the summary had also been circulated to the Finance Division, Ministry of IT and Telecom, State Bank of Pakistan and Oil and Gas Regulatory Authority (OGRA) for their comments.
The proposals relating to the Fuel Relief Scheme, funding of Rs75 billion for the scheme, Rs1.73 billion for the digital system and related implementation arrangements have been submitted for consideration and approval of the ECC of the Cabinet.
